Growing Ventures
In a World of Software Abundance, Focus On Distribution
When we acquired Notehouse in summer 2025, it looked like a straightforward software deal on paper. A HIPAA compliant CRM for social workers and nonprofit leaders with $100k in annual recurring revenue, 250+ customers and a 4.7 star Capterra rating.
But within weeks of closing, we threw away the entire software and rebuilt it from scratch. So what exactly did we buy then?
What we bought was access to an audience. And in the age of AI and the commoditization of software development, this will matter more than ever.
What we actually acquired
The founder of Notehouse was an immigration counselor from the US who had spent six years building something her users genuinely loved by scratching her own itch. She understood their world, because she lived in it. That deep understanding translated into a product that attracted a loyal customer base.
The codebase was a different story.
Multiple agencies had worked on it over the years and the result was layers of technical debt piled on top of itself, including a week long outage in December 2025 2024.
During due diligence, I sat with this tension for a while. On one side was broken code that would need to be completely redone. On the other were 250+ customers paying every month who genuinely relied on the product for their day-to-day work.
We decided to move forward with the deal, because what I learned was that code can always be replaced. An audience that trusts you cannot, because distribution is the hard part now – and software is not.
We rebuilt the entire application over the course of six months while still leaving the legacy software in place, which made it more difficult, yet still doable. When we flipped the switch in January 2026, not a single customer left.
I mean, think about it: we had replaced the entire code and retained 100% of the audience, because... the real asset was never the code anyway.
Software is becoming a commodity, but distribution is not
This shift isn't new. Distribution has always mattered more than most founders want to admit, but AI is accelerating it to a point where ignoring it becomes genuinely dangerous.
AI-assisted software development now lets small teams ship at a speed that would have required a full engineering team just a few months ago. The barrier to building a functional product keeps dropping and it won't stop.
This by extension means the software itself is becoming less and less of a differentiator, especially when there is not other moat around it. The true question is, when everyone can build software, who can build distribution?
What this means for founders and operators
If you are a founder or an operator, here is what I would tell you:
- First time founders are obsessed with product. Second time founders are obsessed with distribution. This quote from Justin Kahn has been true in the pre-AI era and will become only more important as we move towards a world of software abundance.
- Build your audience with the same energy you build your product. The founders I admire most today aren't shipping code first. They are writing, posting and building communities around a specific problem alongside their product.
- If you don't know where to go from here, go niche. Fewer competition means more eyeballs for products that stand out by being focused on a specific use case rather than a broad one.
There are countless ways to build distribution. From my experience, picking one or two channels and going deep on them beats spreading yourself thin every time.
Let me give you an example:
Notehouse's focus is on word-of-mouth (hard to replicate and a real moat), SEO (especially with mini tools – more on that soon) and short-form video (not sure yet, we are still experimenting with this)
So here's my question to you: if you had one hour today to either build your product or build distribution, which one would you pick?